HP ADHESIVES 2023-24 Annual Report Analysis

Thu, 29 Aug

HP ADHESIVES has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

HP ADHESIVES Income Statement Analysis

• Operating income during the year rose 1.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 80.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 13.1% in FY24 as against 7.4% in FY23.
• Depreciation charges increased by 32.7% and finance costs decreased by 18.0% YoY, respectively.
• Other income declined by 3.3% YoY.
• Net profit for the year grew by 89.4% YoY.
• Net profit margins during the year grew from 4.7% in FY23 to 8.7% in FY24.

HP ADHESIVES Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	2,330	2,360	1.3%
Other income	Rs m	34	33	-3.3%
Total Revenues	Rs m	2,364	2,393	1.2%
Gross profit	Rs m	172	310	80.5%
Depreciation	Rs m	32	43	32.7%
Interest	Rs m	23	19	-18.0%
Profit before tax	Rs m	150	281	87.0%
Tax	Rs m	42	75	80.8%
Profit after tax	Rs m	109	206	89.4%
Gross profit margin	%	7.4	13.1
Effective tax rate	%	27.8	26.8
Net profit margin	%	4.7	8.7

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HP ADHESIVES Balance Sheet Analysis

• The company's current liabilities during FY24 down at Rs 266 million as compared to Rs 301 million in FY23, thereby witnessing an decrease of -11.8%.
• Long-term debt down at Rs 2 million as compared to Rs 27 million during FY23, a fall of 94.3%.
• Current assets rose 27% and stood at Rs 1 billion, while fixed assets fell 14% and stood at Rs 751 million in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 2 billion as against Rs 2 billion during FY23, thereby witnessing a growth of 7%.

HP ADHESIVES Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	1,483	1,689	13.9
Current Liabilities	Rs m	301	266	-11.8
Long-term Debt	Rs m	27	2	-94.3
Total Liabilities	Rs m	1,841	1,977	7.4
Current assets	Rs m	967	1,226	26.8
Fixed Assets	Rs m	875	751	-14.1
Total Assets	Rs m	1,841	1,977	7.4

HP ADHESIVES Cash Flow Statement Analysis

• HP ADHESIVES 's cash flow from operating activities (CFO) during FY24 stood at Rs 228 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -151 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -72 million, an improvement of 41% on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs 4 million from the Rs -98 million net cash flows seen during FY23.

HP ADHESIVES Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	-50	228	-
Cash Flow from Investing Activities	Rs m	75	-151	-
Cash Flow from Financing Activities	Rs m	-123	-72	-
Net Cash Flow	Rs m	-98	4	-

Current Valuations for HP ADHESIVES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 2.2, an decline from the EPS of Rs 5.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 101.5, stands at 43.0 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.5 times, while the price to sales ratio stands at 4.0 times.
• The company's price to cash flow (P/CF) ratio stood at 103.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	126.8	25.7
TTM Earnings per share	Rs	5.9	2.2
Diluted earnings per share	Rs	1.2	2.2
Price to Cash Flow	x	9.4	103.1
TTM P/E ratio	x	12.2	43.0
Price / Book Value ratio	x	4.9	15.2
Market Cap	Rs m	7,207	25,633
Dividends per share (Unadj.)	Rs	0.0	0.3

Ratio Analysis for HP ADHESIVES

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 4.6x during FY24, from 3.2x during FY23. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 16.0x during FY24, from 7.6x during FY23. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company improved and stood at 12.2% during FY24, from 7.3% during FY24. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 17.7% during FY24, from 11.5% during FY23. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 11.4% during FY24, from 7.1% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	3.2	4.6
Debtors’ Days	Days	584	564
Interest coverage	x	7.6	16.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	7.1	11.4
Return on equity	%	7.3	12.2
Return on capital employed	%	11.5	17.7

To see how HP ADHESIVES has performed over the last 5 years, please visit here.

HP ADHESIVES Share Price Performance

Over the last one year, HP ADHESIVES share price has moved down from Rs 104.3 to Rs 101.5, registering a loss of Rs 2.8 or around 2.7%.

Overall, the S&P BSE SENSEX is up 25.9% over the year.

(To know more, check out historical annual results for HP ADHESIVES and quarterly results for HP ADHESIVES )